Cyprus updates

Arbitration & ADR

Contributed by George Z Georgiou & Associates LLC
Supreme Court dismisses appeal in Michaelides v Cooperative Bank of Pegia
  • Cyprus
  • 13 December 2018

The Supreme Court recently dismissed an appeal of a first-instance judgment which had applied the well-established principle that arbitral award registrations are a formality wherein district courts do not proceed to examine the merits or substance of the award. The Supreme Court rejected all of the appellant's arguments, dismissed the appeal in its entirety and endorsed the first-instance court's approach, which had been based on well-established case law.

Appellants partially succeed in challenging first-instance court judgment
  • Cyprus
  • 04 October 2018

The Supreme Court recently ruled that only part of a court judgment that had upheld an arbitrator's decision would be set aside. The appellants had raised a number of objections in their appeal, including that the summons to recognise and enforce the arbitral award had been filed improperly as the hearing had not been conducted in the same manner as a lawsuit, the parties had not agreed to refer the dispute to an arbitrator and the arbitrator had not had the legal authority to issue a mortgage disposal order.

Supreme Court annuls arbitral award due to arbitrator's impartiality
  • Cyprus
  • 02 August 2018

In a recent Supreme Court case, the appellants appealed to the court to set aside or annul the first-instance court judgment which had upheld an arbitrator's decision. The Supreme Court agreed with the appellants' position on the matter and stated that the first-instance court had failed to deal with the examination of the legitimacy of the arbitration proceedings and the manner in which the arbitrator had conducted the proceedings.

Court finds real likelihood of bias and orders arbitrator's dismissal
  • Cyprus
  • 24 May 2018

In a recent Limassol District Court case, the applicants applied for the dismissal and replacement of an arbitrator. They argued that the relationship between the arbitrator and the respondents' main witness in the arbitration proceedings and his brother would lead a reasonable person to find that there was a real likelihood of bias. As a result, the applicants argued that the relationship between the parties constituted misconduct in arbitration proceedings.

From Russia with love? District court rejects application to enforce Russian arbitral award
  • Cyprus
  • 12 April 2018

In a recent Limassol District Court case, the applicants requested the registration and enforcement in Cyprus of a Russian arbitral award. Τhe court found that the applicants had failed to provide evidence of whether Russia was a contracting state to the New York Convention and that the award's translation did not fulfil the convention's requirements. As a result, the application to register and enforce the arbitral award was rejected.


Banking

What to keep in mind before entering into banking or finance transactions
  • Cyprus
  • 03 August 2018

No banking and finance transaction is the same. However, there are a number of considerations that financial institutions should keep in mind when negotiating the provision of loans and the entry into other financial arrangements. The proper structuring of a finance transaction ensures the due performance of its terms – especially in situations of default and, more specifically, the borrower's insolvency.

Launching an ICO through Cyprus – an overview
  • Cyprus
  • 10 November 2017

Unlike many other popular initial coin offering (ICO) jurisdictions, Cyprus is an EU member state and, as such, founders of ICOs must comply with the panoply of single market regulation. However, as they are largely unregulated at present, the benefits of launching an ICO in Cyprus can be significant. These include an EU base, a central time zone, access to Cyprus's vast array of tax treaties and white-list status among tax authorities globally.

EU Banking Recovery and Resolution Directive: the Cyprus position
  • Cyprus
  • 27 January 2017

In 2013 Parliament passed the Resolution of Credit and Other Institutions Law to facilitate the restoration of the viability of the Cyprus financial sector. However, this law was enacted before the implementation of the EU Banking Recovery and Resolution Directive. Parliament has now enacted the new Law for the Resolution of Credit Institutions and Investment Companies in order to align Cyprus national law fully with EU provisions.


Capital Markets

Registered alternative investment funds – an overview
  • Cyprus
  • 16 October 2018

Cyprus recently introduced a law which aims to modernise its investment fund legislative regime and allows for the establishment of a new type of investment vehicle: the registered alternative investment fund (RAIF). The RAIF is a hybrid legal creature that combines the elements of authorised and regulated funds without extensive bureaucracy or, more importantly, the need for an operating authorisation from the Cyprus Securities and Exchange Commission.

ESMA guide provides clarity regarding obligations under Transparency Requirements Law
  • Cyprus
  • 11 April 2017

The European Securities and Markets Authority recently published a practical guide which provides an overview of each EU member state's national rules for the major holdings notification regime provided under the EU Transparency Directive. The guide clarifies certain key obligations and deadlines which apply under the Cyprus legislation that implemented the EU Transparency Directive and the Transparency Requirements Law.

PDMRs and closed periods under Market Abuse Law
  • Cyprus
  • 07 March 2017

The government recently enacted the Market Abuse Law (102(I)/2016), which implemented the EU Market Abuse Regulation (596/2016). A provision of the regulation which has generated much discussion relates to persons discharging managerial responsibilities and the obligations of persons closely associated with them regarding transactions conducted on their own account concerning the issuer's shares, debt instruments, derivatives or other linked financial instruments.


Company & Commercial

Contributed by Solsidus Law
Directors' duties when launching ICOs
  • Cyprus
  • 06 August 2018

When an initial coin offering (ICO) is structured through a Cypriot company, directors' duties are highly relevant. The directors must approve the framework within which the ICO will be launched. While doing so, directors are legally required to protect the company's interests in line with their fiduciary duties. When directors also invest their own funds in an ICO, under Cypriot law, they must still maintain a conflict-free position.

Forced sale orders on grounds of unfair prejudice and oppression
  • Cyprus
  • 11 June 2018

Shareholder petitions of unfair prejudice have been compared to divorce petitions. Indeed, these shareholder disputes tend to carry the same level of acrimony, especially when courts are faced with the option of deciding the sale of one shareholder's shares to another. Fairness is at the heart of the courts' consideration when deciding cases of unfair prejudice and shareholder oppression.

Service of documents to companies with registered offices in Cyprus
  • Cyprus
  • 02 April 2018

Specific rules apply to the service of court and judicial documents and judgments issued by Cypriot or foreign courts in Cyprus. Among other things, companies must publish details of their registered offices with the Registrar of Companies upon incorporation and file a notification with the registrar within 14 days of any change of address. In addition, the private service of documents must be carried out by a Supreme Court-licensed private process server.

Existence and use of 'golden shares' in private limited liability companies
  • Cyprus
  • 12 February 2018

The concept of a 'golden share' was devised to maintain control of newly privatised companies as they adjust to the free market environment or to prevent takeover by overseas shareholders of private companies operating in fields of national interest. Cypriot company law is silent on the rights enshrined in golden shares. However, case law provides that golden shares represent a separate class of shares, which enable holders to exercise veto rights by having weighted voting rights on specific matters.

Requisition of an extraordinary general meeting
  • Cyprus
  • 18 December 2017

Shareholders of a Cyprus company have the right to request that the directors convene an extraordinary general meeting (EGM), and the directors are legally obliged to do so within a specified time. For the EGM to be legally valid, it must be made only by those who hold at least one-tenth of the company's paid-up share capital and have the right to vote in general meetings. Further, it must be signed and deposited at the company's registered office and must be called within 21 days of the request.


Competition & Antitrust

Contributed by L Papaphilippou & Co LLC
Competition commission initiates proceedings against Mechanical and Electrical Contractors Association
  • Cyprus
  • 16 February 2017

The Commission for the Protection of Competition recently announced that it will initiate proceedings against the Mechanical and Electrical Contractors Association for the prima facie infringement of Section 3.1.b of the Protection of Competition Laws of 2008 and 2014. Once the investigation has been completed and the hearing concluded, all oral and written submissions and observations by the parties will be examined and the commission will publish its final decision.

Competition commission announces investigations into alleged competition law violations
  • Cyprus
  • 08 September 2016

The Commission for the Protection of Competition recently announced investigations into two alleged competition law violations. The first concerns the alleged manipulation of tendering procedures initiated by the Ministry of Transport, Communications and Works for the supply of ready-mix concrete, while the second relates to an alleged abuse of a dominant position in the valet parking services market at Larnaca International Airport.

Guidance on definition of 'undertaking' and 'association of undertakings'
  • Cyprus
  • 24 March 2016

The Supreme Court of Cyprus recently provided useful guidance on the definition of 'undertaking' and 'association of undertakings'. The case concerned an administrative recourse against a Commission for the Protection of Competition decision which held that the Limassol Licenced Porters Association had displayed restrictive behaviour and abused its dominant position.

Commission announces issue of statement of objections
  • Cyprus
  • 17 December 2015

The Commission for the Protection of Competition recently announced that it had issued a statement of objections to the Cyprus Telecommunications Authority (CYTA) for alleged prima facie violations of competition law. The alleged infringements concerned CYTA's dominant position in the retail pay television and retail broadband internet markets through the pricing of its services between 2009 and 2010.

Commission issues interim decision on parking services complaint
  • Cyprus
  • 24 September 2015

The Commission for the Protection of Competition recently published an interim decision concerning a complaint filed by undertakings that provide valet services against the firm that manages Larnaca International Airport. The complaint concerned alleged price fluctuations and changes to designated parking spaces that the respondent had implemented without consulting the applicants.